A Delicate Dollar Balance

If world financiers ever wanted to stay awake nights worrying in the past two years, they could always lie abed wondering about a sudden crash of the dollar that might lead to international economic chaos. That grim scenario came a bit closer to reality last week as the U.S. currency skidded to its lowest level in a year. From a peak reached in late February, the value of the dollar has declined an average of 14% against major currencies and 24% against the British pound.

Inasmuch as the dollar had remained unusually strong for four years, its drop was a belated...